Bitcoin Tumbles After PBOC Rumors Confirmed

UPDATE: The earlier rumors have been confirmed: People’s Bank of China told more than 10 third-party payment service providers yesterday not to give clearing services to online Bitcoin exchanges, China Business News reports, citing a central bank meeting with the companies. This news is pressuring Bitcoin to $678 (on Mt.Gox) but more notably, BTC China rates imply a $588 equivalent price - down 57% from its highs. From a $100-plus premium, BTC China now trades $130 cheap to Mt.Gox as the 'arb' flips.

Talk from the PBOC (via Sina) that "the central bank directs: third party payment institutions shall not undertake business with Bitcoin hosted sites," appears to be responsible for the slump in the virtual currency once again. This expands the PBOC's earlier Bitcoin ban to other institutions. Bitcoin prices have dropped over 20% from their overnight highs - trading at around $715 now. Perhaps even more notable is the relationship between Bitcoin and the precious metals today with the early Bitcoin weakness corresponding almost perfectly to gold and silver strength (and again mid-morning in the US).

We can transact in it, but it would (for the time being) be through an intermediary like BitPay. No government is going to accept anything other than their currency for taxes any time soon.

Once BTC reaches its full value (when 1 satoshi = the value of the smallest logical transactable value (maybe the value of a pack of gum or such)), then it will start to make sense to go full BTC.

It makes more sense to store value in BTC because we live in a digital age and many transactions are done over the internet. Credit card fraud is everywhere, and credit cards were not invented for use on the internet. When I say "but would be converted to the preferred "bad" currency before transacting with it" I am referring to the conversion that BitPay (or similar) does, converting BTC to USD in real time.

Of course it always makes sense to have gold and/or silver as a backup.

At some point Bitcoin will just slough off the dictats of world superpowers. In it's current early-adopter phase, some turbulence is to be expected. I think it is holding it's own fairly well under these conditions.

And my 6-year degree is in mathematics - and I paid it off years ago - and the taxpayers paid for most of it - and college is a terrible investment unless you get into a top-tier institution - and it makes more sense economically to go to trade school and become a plumber ...

Bitcoin has had an amazing run these past few months. I'm still calling for five and six figure Bitcoin as more and more people around the globe begin to realize that central banks and the governments they own are in an intractable position.

while shilling for Bitcoin takes a lot of time, I can't help but ask why you continue to apparently believe the fallacy that

"crypto-currency" or "virtual currency" EQUALS Bitcoin.

Bitcoin is AN example of those things, they are not it. You straw man the idea that virtual/crypto-currencies are here to stay, which is true, and then fallaciously follow up with Bitcoin is here to stay.

The single claim I have seen you or anyone make as to why this should be the case, is "first adopter" status, and that is a VERY weak reason to not turn paper profits into real ones by cashing out. If the powers that be, (as you supposedly think you are opposing with BTC), choose to create an officially sanctioned, properly supported, fully-convertible "crypto-currency" that is equivalent to legal tender, their USCoin would wipe BTC out in a day.

Don't fool yourself to think privacy, anonymity, fighting fiat, or any other nonsesnse would stop it. What people are chasing with BTC is easy money, that's why shoeshine boys are telling me about how their buddy set up a mining rig, and why LTC et al see growth as people chase the next e-Coin with a lower entry margin.

BTC is 50% penny stock, and 50% commodity (virtual commodity) and 0% currency. It can and will be vaporized, either by a far more convertible official alternative, or by advancing technology leading to its undoing. It will never reach "a million dollars" and it is completely driven by speculators and controlled by the 20%ers.

Feel free to shill some FUD in response, I'm all ears, and you've just been....refer to ID-name ;)

Aye, actually the price is right back where it was 10 days ago -- the last time China's Central Bank opened it's big fat mouth. Also consider, over these past 10 days 36,000 bitcoins were freshly minted. Also, you gotta pay to play, arm-chair quaterbacking from the sidelines is free, though.

don't criticize What you can't understand Your sons and your daughters Are beyond your command Your old road is Rapidly agin' Please get out of the new one If you can't lend your hand For the times they are a-changin

If the powers that be, (as you supposedly think you are opposing with BTC), choose to create an officially sanctioned, properly supported, fully-convertible "crypto-currency" that is equivalent to legal tender, their USCoin would wipe BTC out in a day.

Nonsense. People are looking for a way to AVOID being ripped off by the "powers that be." Only a bankster could be so delusional as to believe that the "official" status of a currency adds value. No - creation of "value" through legislative fiat is nothing but a fraud. Producers create value, not governments or banksters.

Edit: just to add - the reason that you stack gold is because YOU don't think that the treasury secretary's signature on a green piece of paper confers value.

Nonsense. People are looking for a way to AVOID being ripped off by the "powers that be." Only a bankster could be so delusional as to believe that the "official" status of a currency adds value. No - creation of "value" through legislative fiat is nothing but a fraud. Producers create value, not governments or banksters.

The people buying BTC for that reason are 0.00000000000001% of the BTC owners and are irrelevant to its ultimate outcome. The reason an official one would have "value" (which is not what i said), is because it could be accepted and used everywhere and would offer a way for people to move "in and out" of it easily.

Edit: just to add - the reason that you stack gold is because YOU don't think that the treasury secretary's signature on a green piece of paper confers value.

I am not saying anything in defense of fiat or the FED. My point is that the 0.000000000000001% of people buying BTC on principle are irrelevant to its "value" in terms of its exchange rate for USD, and irrelevant to the ultimate outcome and fate.

Also, that anyone who has made millions or even thousands on BTC already, and is too stupid to cash out and take the free money, is greedy and foolish beyond belief. fonestars FUD (of 'future' profits) pimping of BTC is gibberish.

Yes, we're well aware of that. Now, can I ask an honest question and get an honest answer instead of the knee-jerk down arrow?

More than once you've posted that you sold some Btc at ~ $200 USD/Btc in order to pay some bills. Subsequent to the huge rise in Nov you've told us that you've bought more.

You sold at ~ $200 and bought those same Btc back for ~$800 to $1200. Were you far less bullsh and optimistic when you sold, or do you have less courage in your convictions than you'd like everyone else to have? If you're convinced in as little as a 4 digit Btc then why not borrow at even a Shylockish 20% APR to pay your bills instead of paying 2400% APR to feed your Btc 'habit? Certainly outlooks change, and we change with them, but your published outlook has never wavered here or at other sites (while simultaneously your investments have).

Rule #1: that's why I won't buy bitcoin. It's not supposed to be an investment, but 'money'. It's supposed to be a 'store of wealth' but it isn't' right now it's an investment. Investments go up relative to money, and they go down relative to money. Soon bitcoin may find it's true value as a store of wealth and therefore money, but until then, I'm not buying.

2nd was a organic exterminator service where hippies only could trade weed for his services and now

3rd he bout 3 biticoins and he spends 12 hours a day tirelessly pumping them up in hopes of 6 figure returns

oddly enough if he would have just stfu about his biticoins 250 people on ZH would would have actually bought into them but diddnt beacuse of how irritated they are by all the noise coming from some gilf's attic.

True on the cost, haul truck tires were $30,000 a tire ten years ago are now just over $70,000 a tire. A truck was 3.8 million is now just shy of 8 million. Mining costs have more than doubled, hauls get longer, pits get deeper, ore grades get poorer, regulations get stricter and PR is an ever increasing concern.

FYI, for those who watched Big History on the H2 channel, know that the Earth has enough gold in its molten region, to cover the entire earth surface with gold that's 15 feet (5m) deep. That's a LOT of gold.

The problem is an extreme technical one, i.e. getting at it, as the combination of pressures + temperatures are beyond today's technology.

But they don't troll gold and silver. They own gold/silver AND bitcoin.

Rather, what I see is 24/7 trolling of bitcoiners by scared goldbugs. Maybe now they can relax a little bit and think about how they are going to get their wealth out of their local mafia jurisdiction after currency controls are imposed.

If an element has an affinity for iron, causing it to concentrate in the Earth's core, then that same affinity would cause it to concentrate in (rare) iron-based asteroids. Iron-based asteroids are pieces of the cores of shattered planetesimals. Mine gold in the asteroid belt!

I wouldn't trade an ounce of silver for a bitcoin. I wouldn't mind gambling 10 bucks on 1 but that's about it. I know the pricing mechanism for bitcoin is reverse of how we think about money but still. Bitcoin is just too volatile, even more so than silver, and too young to be anything but speculative.

Awesome observations! Now, can you use fonestar-like persistence and zeal and convince everyone of that?I'd be interested in buying all of those stock after everyone takes your advice and dumps them. Talk about pennies on the dollar.

got to agree, mining stocks are awful investment. physical or noting. If you want stocks, pick one that actualy has respect for thir shareholders. they are few and far between and way far away from miners.

They'll just scream its another tulip bubble at 10,000 - of course ignoring all the OTHER times they did the same thing and Bitcoin didn't go to zero. (Which is what bubbles do, they deflate, permanently.)

You've conferred upon your the title of "Sole Arbiter of What Defines a Bubble"?

Bubbles do not always burst violently and they do not of necessity deflate permanently. If enough windbags pump air in you can be left with a flimsy asymetric structure where outflow exceeds input, but when the pumpers become exasperated and as new pumpers become scarcer, then they might find a structure that might have been sustainable if it wasn't so large.

Charts on that 1633-37 period are not available but most contemporaneous reports had a steady rise followed by a crash; Btc on the other hand is on a roller coaster. I'd say that information is much more quickly discovered and that of course in 1637 news traveled slowly and was accordingly smoothed, but that would assume that Btc buyers/sellers are actually basing their speculation on a flow of information.

If you'd like to defend that the buyers/sellers are in fact basing their decisions on information, then I would like very much to hear some actual examples of such. (# of reprted merchants accepting it, for example, does not correlate well with the rise. Neither does # of users, What correlates with the fall? PBOC? Sure. Rise: US Congress hearing? Sure, but the timing is not at all exact in either case, and accounts for very little of the volatility).

regards,, but

p.s. the windbag and pumper comments were inserted only to flesh out the analogy and were not intended to offend Btc enthusiasts

expomanure, you prove your own point with the whole facts and keyborad thing. Funny you are attempting to lay down the FACTS and pump biticoins. Your facts I would see as asumptions. Dangerous assumptions in FACT.

'Libertarians' who badmouth BTC need to have their IQ or their Agenda questioned, since BTC and Gold share a common enemy: CBs and their fiat currencies. The CBs must love the D&C (divide & conquer) PR they are pulling off on the fake-libertarians.

What one won't do (in damage), the other one will:Both take fiat out of the VoM game and foster a Parallel Economy. And we all know how desperate the Fed and their CB friends are to use QE to ignite VoM, and how much they hate competition.

According to the rumor tools of the Central Bank, the market experienced a plunge as multiple parties caused a panic through market manipulation. Key words: Central Bank; rumors; tools Dec. 16, 2013 (afternoon) News: This afternoon many news items were disseminated which stated that the Central Bank was poised to halt third party payment service processing of bitcoin exchange payment and clearing services. The source presented the news in a serious tone, as if it were true.

At first, hardly anyone believed the rumors, but due to Okcoin (the second largest domestic exchange) ceasing usage of the Tenpay withdrawal service several days prior, there were some authenticated Weibo (Chinese twatter) users who tweeted as follows:

After this, still more QQ members posted fake photoshopped announcements from the Central Bank, see below:

QQ group member posted the fake announcement from the People's Bank.

Xiao Bian purposefully opened the Central Bank's “Payment and clearing department” page. (URL), The mentioned announcement simply didn't exist. As you can see, the rumormongers went to great lengths to convince others that the rumors were true.

Under the various levels of pressure, the market began to panic, those speculating in virtual currencies began to dump, in the end leading to a snowball effect. The (Agebits) of a lesser-known exchange Bit Age (the company that I, Xiao Bian, am at), at that instant dropped from over 2 Yuan to 0.9 Yuan, halving in value. Although there was a later recovery, it stayed low at its current value near 1.5. Here's a screenshot:

In a similar vein, I bought some (Zhishubi – Prime Bits?) that fell from 22 Yuan to 16.51, causing me to sweat as I had put in at 25. But as I am a bit crazy (not sure here), I not only didn't sell off, but took the opportunity to buy low, and at 19.5 invested 3000 Yuan, sold at 20, and made a nice small profit.

It's not clear if this “Rumor of the Central Bank Halting Payment” event is or isn't so-called “experts at adding fuel to the fire”. But as far as I'm concerned, there were definitely experts who took advantage of it to make out like bandits.

There are great risks associated with investment in virtual currencies, definitely not merely limited to the inherent ups and down of the instrument. One must also consider the fluctuations due to rumors started in QQ groups. I respectfully invite all Bit Age clients to maintain their vigilance, and exert caution by reviewing multiple verification sources to avoid being taken advantage of by similar rumors, and suffering great losses.

--------------------

So, you have a photoshopped website pic, deleted tweets, and other dodgy material. Guess the truth will come out eventually.

You have turned the stupid up to 11. The only reason to have bitcoin is to eventually find someone (stupid) enough to exchange real, tangible goods or services for it. If you just store them on your hard drive forever, what the hell good are they? The USD price is relevant because it is a measure of the relative purchasing power of a bitcoin.

Face it, you and CH1 are getting butt-raped these last few days on your bitcoin "investments". By all means, keep buying all the way down.

The only reason to have bitcoin is to eventually find someone (stupid) enough to exchange real, tangible goods or services for it. If you just store them on your hard drive forever, what the hell good are they?

The only reason to have fiat is to eventually find someone (stupid) enough to exchange real, tangible goods or services for it. If you just store your fiat in the bank forever, what the hell good is it?

There's plenty of gold jewelry to be bought up, even if 80% of the mines close. Especially as unemployed people get more economically/financially desperate. And let's not kid anyone... it's the chain of middlemen (wholesale and/or retail) who make the biggest margins. The End-users always pays the Tab for all others before them.

Again, this is EXPECTED. At least for traders who know the cycles of how Bitcoin trades. I keep explaining this, but its all "Beanie Babies SELL SELL SELL" and whatever else the usual suspects post in every thread.

I completely expect to increase my position on the downswing, and when everyone is considering all hope lost, to get back in for the next ride up, like the last THREE TIMES it happened. Long term charts people, just look at the patterns. It isn't that difficult.

Consider this, oh market guru, what happens when some of those 927 people holding half of all bitcoins decide to start spending some of those ill gotten gains? You'll get what needs to happen... a price drop and a distribution of bitcoin out of concentrated hands. In the end, perhaps bitcoin will be all that. but it needs to get out of that concentrated position first.

Oh right, the variant on the "what if someone dumps all at once theory" in addition to the old standard "what if the government buys all the bitcoins". Look, the probability of that happening is rather remote, and if it did - I'd be snapping up so many coins I'd make the Treasury look like a cheapskate.

The "927" to which you refer are visionaries...as such they know in their hearts where Bitcoin is going. Aside from passing a few to keep the lights on, none of them will dump any significant amount anytime soon...there won't be anymore $12 million pizzas...